BDO USA, LLP STATE TAX COMPARISON GUIDE 2017
Finding the right environment for growth. is more than just a great place to visit. It s also a premier destination for companies seeking to start or grow a business. The Sunshine State presents a compelling case for enterprises across all industries. The third largest economy in the U.S., boasts a talented workforce of 9.9 million, as well as robust job growth. The state is not only a key player in tourism, but in burgeoning industries like clean tech, life sciences, manufacturing, and more. Thanks to sunny skies, sandy beaches, and an affordable cost of living, also affords residents an unmatchable quality of life that many businesses desire for their employees. But perhaps the biggest boon for businesses? s low tax rate. is one of the few states in the country that carries no individual income tax. When compared to all states, has the fourth best tax rate in the nation, according to the Tax Foundation s State Business Tax Climate Index. The tax savings illustrated in the charts on the following pages show how locating your business, and living in, can result in substantial tax savings. These examples are for illustrative purposes only. Before making any decisions regarding your particular situation, you should consult your tax advisor or contact BDO at 561.688.1600. Source: U.S. Department of Labor, Bureau of Labor Statistics
A PROPOSAL TO PROVIDE PROFESSIONAL SERVICES FOR COMPANY XYZ Page 3 Individual income tax by state 120,000 Individual Income Tax State 100,000 80,000 60,000 40,000 20,000 $1,000,000 Taxable Income 700,000 Individual Income Tax State 600,000 500,000 400,000 300,000 200,000 100,000 $5,000,000 Taxable Income 1,400,000 Individual Income Tax State 1,200,000 1,000,000 800,000 600,000 400,000 200,000 $10,000,000 Taxable Income
A PROPOSAL TO PROVIDE PROFESSIONAL SERVICES FOR COMPANY XYZ Page 4 Estate tax by state 3,500,000 Estate Tax State 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 $25,000,000 Taxable Estate 8,000,000 7,000,000 6,000,000 Estate Tax State 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 $50,000,000 Taxable Estate 16,000,000 14,000,000 12,000,000 Estate Tax State 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 $100,000,000 Taxable Estate
A PROPOSAL TO PROVIDE PROFESSIONAL SERVICES FOR COMPANY XYZ Page 5 Capital gains tax by state 14,000,000 Capital Gains Tax State 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 $100,000,000 Gain on Sale Capital Gains Tax State 70,000,000 60,000,000 50,000,000 40,000,000 30,000,000 20,000,000 10,000,000 $500,000,000 Gain on Sale
A PROPOSAL TO PROVIDE PROFESSIONAL SERVICES FOR COMPANY XYZ Page 6 Corporate income tax by state 900,000 800,000 Corporate Tax State 700,000 600,000 500,000 400,000 300,000 200,000 100,000 $10,000,000 Taxable Income 2,500,000 Corporate Tax State 2,000,000 1,500,000 1,000,000 500,000 $25,000,000 Taxable Income 4,500,000 Corporate Tax State 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 $50,000,000 Taxable Income
A PROPOSAL TO PROVIDE PROFESSIONAL SERVICES FOR COMPANY XYZ Page 7 The BDO network Where you need us, when you need us ABOUT BDO INTERNATIONALLY Accounting and Audit 57% Tax 22% Consulting / Advisory 21% $7.6 billion revenues 158 Countries 1,400+* offices 67,000+ Total personnel * Including exclusive alliances of BDO Member Firms ABOUT BDO NATIONALLY Accounting and Audit 50% Tax 33% Consulting / Advisory 17% $1.29 billion revenues 60+ offices 500+ Alliance firms 6,057+ Total personnel
A PROPOSAL TO PROVIDE PROFESSIONAL SERVICES FOR COMPANY XYZ Page 8 Tax services summary Our wellplanned, flexible and effective tax services will help you meet deadlines with minimum disruption to your business. We will leverage tax technology applications and indepth knowledge to deliver an efficient process that manages risk and underpins your tax strategy. In addition, our teams will work seamlessly to uncover every legitimate means of saving tax dollars with sound advice and proven tax strategies. At BDO, you will have direct access to our partners and senior professionals. Our local partnerled, handson approach delivers high quality, responsive service through short, functional chains of communication. TAX PLANNING AND CONSULTING SERVICES Our tax services go beyond basic tax planning and preparing or reviewing tax returns and the global resources of the BDO International Limited Member Firm network, we work hard to keep our clients informed of new opportunities and challenges to help you expand business and secure tax savings. Our tax planning and consulting services include income tax accounting, pass through entity, state and local taxation, international tax consulting, transfer pricing, expatriate tax consulting, compensation and benefits, research & development credits, and cost segregation. EFFECTIVE TAX COMPLIANCE MODEL As part of the tax compliance service module, BDO prepares income tax returns and, where appropriate, amended returns, claims for refund, and accounting method or period change requests. With the complexity and the constantly changing nature of the tax laws, this task has become much more involved and time consuming and, therefore, should not be undervalued. Our thorough service approach and strategic focus is driven by our commitment to assisting companies in accurately minimizing and reflecting their liability through: Evaluation of tax positions; Discussion of the tax implications of business decisions; Compliance as a foundation for strategic tax services; Seamless interaction of tax planning and consulting; Proactive identification of tax saving opportunities; Access to the highest degree of BDO s technical skills and resources locally, in the U.S., and around the world. ACCESS TO NATIONAL LEADERS Our national resources work alongside our local tax professionals to serve clients and review tax planning matters. In Washington, D.C., our STS leaders help BDO professionals and their clients obtain rulings from the national office of the Internal Revenue Service ( IRS ). They maintain regular contact with the Treasury Department and communicate current tax developments to our clients through timely tax publications. Our national leaders are also accessible directly to you, as desired, and are available to provide assistance regarding various complex tax issues, including obtaining opinions from the IRS on a noname basis and other matters.
A PROPOSAL TO PROVIDE PROFESSIONAL SERVICES FOR COMPANY XYZ Page 9 Additional services BDO offers a breadth of services tailored to meet your needs. Our core services include: ADVISORY Business Services & Outsourcing (BSO) Management & Technology Advisory Services (MTAS) Risk Advisory Services (RAS) Transaction Advisory Services (TAS) ASSURANCE Accounting and Auditing Employee Benefit Plan Audits Human Capital Solutions Information Systems Assurance IPO Services SarbanesOxley Services and Compliance SSAE 16 Service Organization Control Reports SEC Reporting SysTrust/Webtrust BDO CONSULTING Corporate Finance & M&A Advisory Corporate Real Estate Advisory Financial Services Advisory Forensic Insurance & Recovery Forensic Technology Services Global Forensics Litigation, Arbitration & Dispute Advisory Restructuring & Turnaround Services Technology Advisory Services & Cybersecurity Valuation & Business Analytics BDO CAPITAL ADVISORS, LLC Investment Banking TAX Account and Interest Recovery Services Accounting for Income Tax Accounting for Uncertainties in Tax Positions Accounting Methods Compensation and Benefits Corporate/Federal Taxation Cost Segregation Expatriate Tax Fixed Asset Advisory International Tax NOL Carryforward Analysis Nonprofit Taxation Outsourced Financial Services Passthrough Taxation Private Client Tax Services R&D Credits and Incentives Sales Effectiveness State and Local Taxation Tax Controversy and Procedures Tax Process Transformation Services Transfer Pricing Value Added Tax
A PROPOSAL TO PROVIDE PROFESSIONAL SERVICES FOR COMPANY XYZ Page 10 BDO s industry focus The power of industry experience is perspective perspective we bring to help you best leverage your own capabilities and resources. Industry experience has emerged at the top of the list of what businesses need and expect from their accountants and advisors. BDO's industry focus is part of who we are and how we serve our clients and has been for over a century. We demonstrate our experience through knowledgeable professionals, relevant client work and participation in the industries we serve. Whether in the field with our clients from oil rigs in the Gulf of Mexico to manufacturing plants around the world, authoring articles on salient issues, speaking at industry conferences, or commenting on breaking news, our industry practices bring perspective on trends, opportunities, issues and regulations that frame our services and approach to address your needs and your industry. WE KNOW YOUR INDUSTRY Consumer Business Government Contracting Financial Services Healthcare Gaming, Hospitality and Leisure Manufacturing and Distribution I appreciate the ability to pick up the phone and talk to the partner at any time. I most especially appreciate that the partner can quickly get national resources on the phone also to address a pressing matter. Natural Resources Nonprofit and Education Private Equity JASON BERG Principal Accounting Officer Amerco/UHaul Public Sector Real Estate and Construction Restaurants Technology and Life Sciences
A PROPOSAL TO PROVIDE PROFESSIONAL SERVICES FOR COMPANY XYZ Page 11 Thought leadership and education BDO commits significant resources to keep our professionals and our clients uptodate on current and evolving technical, governance, industry, and reporting developments. Our thought leadership consists of quarterly email updates, publications, surveys, practice aids, and tools that span a broad spectrum of topics that impact financial reporting, as well as corporate governance. Our focus is not to simply announce changes in technical guidance, regulations or emerging business trends, but rather expound on how such changes may impact our clients business. Some examples of our thought leadership offerings include the following: Board Reflections BDO s Board Governance Services site includes BDO s proprietary studies, publications, practice aids, and educational programs to keep board members of both public and private companies uptodate on emerging issues and trends to assist in fulfilling their corporate oversight responsibilities. Visit: www.bdo.com/services/assurance/boardgovernance/overview Significant Accounting and Reporting Matters Guide Quarterly digest of final and proposed financial accounting standards designed to help audit committees, boards and financial executives keep up to date on the latest corporate governance and financial reporting developments. Technical Research Tools BDO uses Accounting Research Manager (ARM) as a primary source of insightful interpretations on GAAP, GAAS and Securities and Exchange Commission rules. ARM is updated daily and is considered to be one of the timeliest and most comprehensive online databases of analytical interpretations of accounting, auditing and SEC matters. Access to ARM, and a number of other research tools provide each professional the technical research capability to enable immediate response to clientspecific technical issues. BDO Knows Flash Reports Provide briefs about select technical and regulatory developments and emerging issues are made immediately available to BDO professionals and to clients. Client Advisories Concise documents that provide timely commentary, analysis and insights on events and trends of interest to management and boards of directors. BDO Knows: Financial Reporting Letters Provide more in depth discussions and practical guidance on technical guidance affecting both public and private entities. Tax Newsletters and Alerts Updates with respect to federal, state, local, expatriate, and international developments along with other specific tax planning and strategy considerations including specific practice areas such as compensation and benefits, private client and individual filer services, transfer pricing, Foreign Account Tax Compliance Act, etc. Industry Newsletters, Alerts, Reports, Proprietary Studies, and Surveys A variety of publications depicting specific industry issues, emerging trends and developments.
A PROPOSAL TO PROVIDE PROFESSIONAL SERVICES FOR COMPANY XYZ Page 12 People and values Our culture and core values reflect how we manage our work, our relationships and ourselves. BDO S CORE PURPOSE & CORE VALUES The following core values embody the standards by which we conduct ourselves and the standards you can expect in all our dealings with you as a client: PEOPLE FIRST Care Earn trust and be trusting Be respectful We before me! EXCEPTIONAL: EVERY DAY, EVERY WAY Have integrity Be a true professional Everyone is a client Model excellence! EMBRACE CHANGE Be forward thinking Lead the way Grow and help others grow Move to improve! EMPOWERMENT THROUGH KNOWLEDGE Listen intently Be direct Share what you know Be curious! INCLUSION AT BDO Inclusion at BDO starts the way everything at BDO starts: with relationships. Our history of inclusion, building teams with a wide range of backgrounds and perspectives has made our company a better place to work, and made us better at what we do. As a company dedicated both to industry excellence and the wellbeing of our employees, BDO is deeply committed to fostering workplace inclusion across all dimensions. Through our inclusion strategy and related programs, BDO encourages diverse voices and empowers our professionals whoever they are, and wherever they re from. We have a focus on three objectives: Build an inclusive environment that focuses on: Generations Global mobility LGBT Parents Race and ethnicity Veterans Women Enable flexibility Encourage open minds CHOOSE ACCOUNTABILITY Take personal responsibility Be humble Mind the bottom line Do what you say you ll do!
BDO is the brand name for BDO USA, LLP, a U.S. professional services firm providing assurance, tax, advisory and consulting services to a wide range of publicly traded and privately held companies. For more than 100 years, BDO has provided quality service through the active involvement of experienced and committed professionals. The firm serves clients through more than 60 offices and over 500 independent alliance firm locations nationwide. As an independent Member Firm of BDO International Limited, BDO serves multinational clients through a global network of 67,700 people working out of 1,400 offices across 158 countries. BDO USA, LLP, a Delaware limited liability partnership, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO Member Firms. www.bdo.com Material discussed in this publication is meant to provide general information and should not be acted on without professional advice tailored to your individual needs. 2017 BDO USA, LLP. All rights reserved. www.bdo.com